Correlation Between Steel Dynamics and Resqunit
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Resqunit at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Steel Dynamics and Resqunit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Resqunit AB, you can compare the effects of market volatilities on Steel Dynamics and Resqunit and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Steel Dynamics with a short position of Resqunit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Resqunit.
Diversification Opportunities for Steel Dynamics and Resqunit
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and Resqunit is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Resqunit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resqunit AB and Steel Dynamics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Steel Dynamics are associated (or correlated) with Resqunit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resqunit AB has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Resqunit go up and down completely randomly.
Pair Corralation between Steel Dynamics and Resqunit
Given the investment horizon of 90 days Steel Dynamics is expected to generate 8.78 times less return on investment than Resqunit. But when comparing it to its historical volatility, Steel Dynamics is 8.95 times less risky than Resqunit. It trades about 0.04 of its potential returns per unit of risk. Resqunit AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Resqunit AB on September 4, 2024 and sell it today you would lose (427.00) from holding Resqunit AB or give up 95.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Steel Dynamics vs. Resqunit AB
Performance |
| Timeline |
| Steel Dynamics |
| Resqunit AB |
Steel Dynamics and Resqunit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Resqunit
The main advantage of trading using opposite Steel Dynamics and Resqunit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Resqunit can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Resqunit will offset losses from the drop in Resqunit's long position.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Resqunit vs. ZAZZ Energy of | Resqunit vs. Triboron International AB | Resqunit vs. NCAB Group | Resqunit vs. Vimian Group AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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